AI Summary to Minimize your effort

Index

What is e-Invoicing Under GST? Applicability, Limit & Implementation Date

By Annapoorna

Updated on: Oct 17th, 2024

6 min read

Switch Language

e-Invoicing under GST denotes electronic invoicing defined by the GST law. Just like how a GST-registered business uses an e-way bill while transporting goods from one place to another. Similarly, certain notified GST-registered businesses must generate e invoice for Business-to-Business (B2B) transactions.

Clear is officially GSTN-approved IRP. More than 3,000 large enterprises trust the Clear e-Invoicing solution for unified e-invoicing and e-way bill compliance journey. We provide the best-in-class e-invoicing solution for businesses of any scale and industry. Do not miss exploring the Clear e-Invoicing solution!

Latest Updates

9th September 2024
The GST Council recommended implementing e-invoicing for B2C transactions in a phased manner. Until now, e-invoicing was applicable on B2B transactions by registered persons having turnover exceeding Rs.5 crore.

12th June 2023
The NIC has made it mandatory for taxpayers with turnover more than Rs.100 Crore to login using the Two-factor Authentication from 15th July 2023 for both the e-invoicing and e-way bill systems.

What is e-invoicing under GST?

‘e-Invoicing’ or ‘electronic invoicing’ is a system in which B2B invoices and a few other documents are authenticated electronically by GSTN for further use on the common GST portal.

In its 35th meeting, the GST Council decided to implement a system of e-Invoicing, covering specific categories of persons, mostly large enterprises. Later on, it has been expanded to cover mid-sized businesses and small businesses as well.

e-Invoicing does not imply the generation of invoices on the GST portal but it means submitting an already generated standard invoice on a common e invoice portal. Thus, it automates multi-purpose reporting with a one-time input of invoice details. The CBIC notified a set of common portals to prepare e invoice via Notification No.69/2019 – Central Tax.

Under the electronic invoicing system, an identification number will be issued against every invoice by the Invoice Registration Portal (IRP), managed by the GST Network (GSTN). The National Informatics Centre launched the first IRP at einvoice1.gst.gov.in.

All invoice information gets transferred from this portal to both the GST portal and the e-way bill portal in real-time. Therefore, it eliminates the need for manual data entry while filing GSTR-1 returns and generation of part-A of the e-way bills, as the information is passed directly by the IRP to the GST portal.

Who must generate e invoice and its applicability?

The e invoice applicability can be explained as follows-

Turnover criteria or e Invoice limit

Phase	Applicable to taxpayers having an aggregate turnover of more than	Applicable date	Notification number
I	Rs 500 crore	01.10.2020	61/2020 – Central Tax and 70/2020 – Central Tax
II	Rs 100 crore	01.01.2021	88/2020 - Central Tax
III	Rs 50 crore	01.04.2021	5/2021 - Central Tax
IV	Rs 20 crore	01.04.2022	1/2022 - Central Tax
V	Rs 10 crore	01.10.2022	17/2022 – Central Tax
VI	Rs 5 crore	01.08.2023	10/2023 - Central Tax

For example, taxpayers must comply with e-invoicing in FY 2022-23 and onwards if their Annual Aggregate Turnover (AATO) exceeds the specified limit in any financial year from 2017-18 to 2021-22. The aggregate turnover will include the turnover of all GSTINs under a single PAN across India.

If the turnover in the last FY was below the threshold limit but it increased beyond the threshold limit in the current year, then e-Invoicing would apply from the beginning of the next financial year i.e. FY 2023-24.

Suppose, ABC ltd aggregate turnover was as follows-
FY 2017-18: Rs 15 crore
FY 2018-19: Rs 17 crore
FY 2019-20: Rs 24 crore
FY 2020-21: Rs 19 crore
FY 2021-22: Rs 18 crore

Suppose, QPR ltd started business in FY 2019-20 and earned aggregate turnover as follows-
FY 2019-20: Rs 4 crore
FY 2020-21: Rs 7 crore
FY 2021-22: Rs 11 crore

The ABC Ltd shall mandatorily generate e invoices from 01.04.2022 irrespective of the current year’s aggregate turnover as it has crossed the Rs 20 crore turnover limit in FY 2019-20.

On the other hand, QPR ltd should comply with e-Invoicing from 1st October 2022 since its previous year’s annual turnover exceeds Rs.10 crore.

The sixth phase of e-Invoicing works similar to the fifth phase. You can watch the video below to understand more.

To which transactions and documents does e-Invoicing apply to?

The following transactions and documents listed below fall under
e invoicing applicability –

Documents	Transactions
Tax invoices, credit notes and debit notes under Section 34 of the CGST Act	Taxable Business-to-Business sale of goods or services, Business-to-government sale of goods or services, exports, deemed exports, supplies to SEZ (with or without tax payment), stock transfers or supply of services to distinct persons, SEZ developers, and supplies under reverse charge covered by Section 9(3) of the CGST Act.

Who need not comply with e-Invoicing?

However, irrespective of the turnover, e-Invoicing shall not be applicable to the following categories of registered persons for now, as notified in CBIC Notification No.13/2020 – Central Tax, amended from time to time-

Notified Businesses	Documents	Transactions
1)An insurer or a banking company or a financial institution, including an NBFC 2) A Goods Transport Agency (GTA) 3) A registered person supplying passenger transportation services 4) A registered person supplying services by way of admission to the exhibition of cinematographic films in multiplex services 5) An SEZ unit (excluded via CBIC Notification No. 61/2020 – Central Tax) 6) A government department and Local authority (excluded via CBIC Notification No. 23/2021 – Central Tax) 7) Persons registered in terms of Rule 14 of CGST Rules (OIDAR)	Delivery challans, Bill of supply, financial or commercial credit note or debit note, bill of entry, and ISD invoices.	Any Business-to-Consumers (B2C) sales, Nil-rated or non-taxable or exempt B2B sale of goods or services, nil-rated or non-taxable or exempt B2G sale of goods or services, imports, high sea sales and bonded warehouse sales, Free Trade & Warehousing Zones (FTWZ), and supplies under reverse charge covered by Section 9(4) of the CGST Act.

Systems before and after e-invoicing

Before e-invoicing could apply, businesses generated invoices through various software, and the details of these invoices were manually uploaded in the GSTR-1 return or using ERP.

Once the respective suppliers file the GSTR-1, the invoice information gets reflected in GSTR-2B for the recipients. On the other hand, the consignor or transporters had to generate e-way bills by again importing the invoices in Excel or JSON manually or via ERP.

Under the e-invoicing system, the process of generating and uploading invoice details will remain the same. It’s done by importing using the Excel tool/JSON or via API integration, either directly or through a GST Suvidha Provider (GSP). The data will seamlessly flow for GSTR-1 preparation and for the e-way bill generation too. The e-invoicing system will be the key tool to enable this.

Time limit to generate e-Invoice

Until 30th April 2023, there was no time limit fixed by the GST system or the GST law to generate e-invoices. From 1st May 2023 onwards, the government announced that taxpayers with Annual Aggregate Turnover (AATO) equal to or more than Rs.100 crore must generate e-invoices for tax invoices and credit-debit notes within 7 days of invoice date, failing which such invoices and CDNs will be considered non-compliant. However, the 7-day rule wasn't implemented.

Instead, from 1st November 2023, the government mandated businesses with an AATO of Rs.100 crore or more to report all tax invoices, credit notes and debit notes to any notified IRP within 30 days from the date of issue of the document. This does not apply to taxpayers whose AATO is less than Rs.100 crore.

Process of getting an e invoice

The following are the stages involved in generating or raising an e-invoice.

The taxpayer has to ensure to use of the reconfigured ERP system as per PEPPOL standards. He could coordinate with the software service provider to incorporate the standard set for e-invoicing, i.e. e invoice schema (standards) and must have the mandatory parameters notified by the CBIC, at least.
Any taxpayer has got primarily two options for IRN generation:
- The IP address of the computer system can be whitelisted on the e-invoice portal for a direct API integration or integration via GST Suvidha Provider (GSP) such as ClearTax.
- Download the bulk generation tool to bulk upload invoices. It will generate a JSON file that can be uploaded to the e invoice portal to generate IRNs in bulk.
The taxpayer must thereafter raise a regular invoice on that software. He must give all the necessary details like billing name and address, GSTN of the supplier, transaction value, item rate, GST rate applicable, tax amount, etc.
Once either of the above options is chosen, raise the invoice on the respective ERP software or billing software. Thereafter, upload the details of the invoice, especially mandatory fields, onto the IRP using the JSON file or via an application service provider (app or through GSP) or through direct API. The IRP will act as the central registrar for e-invoicing and its authentication. There are several other modes of interacting with IRP, such as SMS-based and mobile app-based.
IRP will validate the key details of the B2B invoice, check for any duplications and generate an invoice reference number (hash) for reference. There are four parameters based on which IRN is generated: Seller GSTIN, invoice number, FY in YYYY-YY, and document type (INV/DN/CN).
IRP generates the invoice reference number (IRN), digitally signs the invoice and creates a QR code in Output JSON for the supplier. On the other hand, the seller of the supply will get intimated about the e invoice generation through email (if provided in the invoice).
IRP will send the authenticated payload to the GST portal for GST returns. Additionally, details will be forwarded to the e-way bill portal, if applicable. The GSTR-1 of the seller gets auto-filled for the relevant tax period. In turn, it determines the tax liability.

(Source: GSTN)

A taxpayer can continue to print his invoice as being done presently with a logo. The e-invoicing system only mandates all taxpayers to report invoices on IRP in electronic format. You can follow this step-by-step guide to understand the detailed process of generating an e-invoice.

Benefits of e-Invoicing to businesses

Businesses will have the following benefits by using e-invoice initiated by GSTN-

e-Invoice resolves and plugs a major gap in data reconciliation under GST to reduce mismatch errors.
e-Invoices created on one software can be read by another, allowing interoperability and helping reduce data entry errors.
Real-time tracking of invoices prepared by the supplier is enabled by e invoice.
Backward integration and automation of the GST return filing process – the relevant details of the invoices would be auto-populated in the various returns, especially for generating part-A of e-way bills.
Faster availability of genuine input tax credit.
Lesser possibility of audits/surveys by the tax authorities since the information they require is available at a transaction level.
Faster and easy access to formal credit routes such as invoice discounting or financing, especially for small businesses.
Improved customer relations and growth in prospects for small businesses to do business with large enterprises.

How can e-invoicing curb tax evasion?

It will help in curbing tax evasion in the following ways-

Tax authorities will have access to transactions as they take place in real-time since the e invoice will have to be compulsorily generated through the GST portal.
There will be less scope for manipulating invoices since the invoice gets generated before carrying out a transaction.
It will reduce the chances of fake GST invoices, and only genuine input tax credit can be claimed as all invoices need to be generated through the GST portal. Since the input credit can be matched with output tax details, it becomes easier for GSTN to track fake tax credit claims.

What are the mandatory fields of an e-invoice?

e-Invoice must primarily adhere to the GST invoicing rules. Apart from this, it should also accommodate the invoicing system or policies followed by each industry or sector in India. Certain information is made mandatory, whereas the rest of it is optional for businesses. Many fields are also made optional, and users can choose to fill up relevant fields only. It has also described every field along with the sample inputs for the interested users. One can see that certain required fields from the e-way bill format are included now in the e-invoice, such as the sub-supply type.

Below is the gist of the contents of the latest e-invoice format as notified on 30th July 2020 via Notification No.60/2020 – Central Tax:

12 sections (mandatory + optional) and six annexures consisting of a total of 138 fields.
Out of the 12 sections, five are mandatory, and seven are optional. Two annexures are mandatory.
The five mandatory sections are basic details, supplier information, recipient information, invoice item details, and document total. The two mandatory annexures are details of the items and the document total.

The following fields must be compulsorily be declared in an e-invoice:

Sl. no.	Name of the field	List of choices/ specifications/sample Inputs	Remarks
1	Document Type Code	Enumerated List such as INV/CRN/DBN	Type of document must be specified
2	Supplier_Legal Name	String Max length: 100	Legal name of the supplier must be as per the PAN card
3	Supplier_GSTIN	Max length: 15 Must be alphanumeric	GSTIN of the supplier raising the e-invoice
4	Supplier_Address	Max length: 100	Building/Flat no., Road/Street, Locality, etc. of the supplier raising the e-invoice
5	Supplier_Place	Max length: 50	Supplier’s location such as city/town/village must be mentioned
6	Supplier_State_Code	Enumerated list of states	The state must be selected from the latest list given by GSTN
7	Supplier Pincode	Six digit code	The place (locality/district/state) of the supplier’s locality
8	Document Number	Max length: 16 Sample can be “ Sa/1/2019”	For unique identification of the invoice, a sequential number is required within the business context, time frame, operating systems and records of the supplier. No identification scheme is to be used.
9	Preceeding_Invoice_Reference and date	Max length:16 Sample input is “ Sa/1/2019” and “16/11/2020”	Detail of original invoice which is being amended by a subsequent document such as a debit and credit note. It is required to keep future expansion of e-versions of credit notes, debit notes and other documents required under GST.
10	Document Date	String (DD/MM/YYYY) as per the technical field specification	The date when the invoice was issued. However, the format under explanatory notes refers to ‘YYYY-MM-DD’. Further clarity will be required. Document period start and end date must also be specified if selected.
11	Recipient_ Legal Name	Max length: 100	The name of the buyer as per the PAN
12	Recipient’s GSTIN	Max length: 15	The GSTIN of the buyer to be declared here
13	Recipient’s Address	Max length: 100	Building/flat no., road/street, locality, etc. of the supplier raising the e-invoice
14	Recipient’s State Code	Enumerated list	The place of supply state code to be selected here
15	Place_Of_Supply_State_ Code	Enumerated list of states	The state must be selected from the latest list given by GSTN
16	Pincode	Six digit code	The place (locality/district/state) of the buyer on whom the invoice is raised/ billed to must be declared here if any
17	Recipient Place	Max length: 100	Recipient’s location (City/Town/Village)
18	IRN- Invoice Reference Number	Max length: 64 Sample is ‘a5c12dca8 0e7433217…ba4013 750f2046f229’	At the time of the registration request, this field is left empty by the supplier. Later on, a unique number will be generated by GSTN after uploading the e-invoice on the GSTN portal. An acknowledgement will be sent back to the supplier after the successful acceptance of the e-invoice by the portal. IRN should then be displayed on the e-invoice before use.
19	ShippingTo_GSTIN	Max length: 15	GSTIN of the buyer himself or the person to whom the particular item is being delivered to
20	Shipping To_State, Pincode and State code	Max length: 100 for state, 6 digit pincode and enumerated list for code	State pertaining to the place to which the goods and services invoiced were or are delivered
21	Dispatch From_ Name, Address, Place and Pincode	Max length: 100 each and 6 digit for pincode	Entity’s details (name, and city/town/village) from where goods are dispatched
22	Is_Service	String (Length: 1) by selecting Y/N	Whether or not supply of service must be mentioned
23	Supply Type Code	Enumerated list of codes Sample values can be either of B2B/B2C/ SEZWP/S EZWOP/E XP WP/EXP WOP/DE XP	Code will be used to identify types of supply such as business to business, business to consumer, supply to SEZ/exports with or without payment, and deemed export.
24	Item Description	Max length: 300 The sample value is ‘Mobile’ The schema document refers to this as the ‘identification scheme identifier of the Item classification identifier’	Simply put, the relevant description is generally used for the item in the trade. However, more clarity is needed on how it needs to be described for every two or more items belonging to the same HSN code.
25	HSN Code	Max length: 8	The applicable HSN code for particular goods/service must be entered
26	Item_Price	Decimal (12,3) Sample value is ‘50’	The unit price, exclusive of GST, before subtracting item price discount, can not be negative
27	Assessable Value	Decimal (13,2) Sample value is ‘5000’	The price of an item, exclusive of GST, after subtracting the item price discount. Hence, gross price (-) discount = net price item, if any cash discount is provided at the time of sale
28	GST Rate	Decimal (3,2) Sample value is ‘5’	The GST rate represented as a percentage that is applicable to the item being invoiced
29	IGST Value, CGST Value and SGST Value Separately	Decimal (11,2) Sample value is ‘650.00’	For each individual item, IGST, CGST and SGST amounts have to be specified
30	Total Invoice Value	Decimal (11,2)	The total amount of the Invoice with GST. Must be rounded to a maximum of 2 decimals

Format of sample e-invoice

The e-invoice format notified is as follows:

Check out the detailed format of an e-invoice

Download Now

How does Clear e-Invoicing help?

Team Clear provides the best-in-class e-invoicing solution for businesses. The Clear e-invoicing solution also provides an e-Invoicing Tally Connector, enabling taxpayers to perform e-invoicing activities without leaving a tally screen. Team Clear ensures a safe migration to an upgraded UI with no changes to your historical data.

Team Clear also offers various modes through which e-invoices can be generated by the taxpayers, such as seamless API integrations, Excel mode, FTP, SFTP or Tally connector. The user can enjoy numerous value additions such as-

Seamless generation of 5,000 e-invoices per minute
Integration with a high-fidelity solution with 99.99% uptime
100+ data validations to ensure an error-free smooth e-invoicing experience
Auto-retry of failed EWBs (with distance error) to improve the success rate of EWB generation
Automatic generation of the e-way bill after IRN generation without any ingestion of data
Faster loading of ‘e-invoices’ and ‘e-way bills’ on the screen for as many as 1 lakh documents
Reconciliation vis-a-vis e-way bill and GSTR-1 data, insightful reports, customised print template for e-invoice, data archiving, etc.

Frequently Asked Questions

To whom will e-invoicing apply?

In the sixth phase of e-invoicing, taxpayers must comply with e-invoicing norms from 1st August 2023 if their turnover exceeds the specified limit of Rs.5 crore in any financial year from 2017-18 onwards. The aggregate turnover will include the turnover of all GSTINs under a single PAN across India.

However, the government has exempted certain categories of businesses from complying with e-invoicing as follows.

Can an e-invoice be cancelled partially/fully?

An e-invoice cannot be cancelled partially but can be cancelled wholly. On cancellation, it must be reported to the IRN within 24 hours. Any attempt to cancel thereafter cannot be done on the IRN and must be manually cancelled on the GST portal before the returns are filed.

Will the bulk uploading of invoices for the generation of IRN be possible?

No, invoices must be uploaded one at a time into the IRP. The ERP of a business will need to be designed to place the request for the upload of individual invoices.

Will there be a facility for e-invoice generation on the common GST portal?

No, invoices will continue to be generated on the individual ERP software currently in use by businesses. The invoice must adhere to the e-invoicing standard format and include the mandatory parameters. The direct generation of invoices on a common portal is not being planned at the moment.

What are the types of documents that are to be reported to the IRP?

Invoices by the supplier, credit notes, debit notes as per the GST law, or any other document as notified under GST law are to be reported as an e-invoice.

For more FAQs on e-Invoicing, read our article on e-Invoicing FAQs.

What is the 7 day time limit for e-invoice?

The GSTN had announced that from 1st May 2023 onwards, taxpayers with Annual Aggregate Turnover (AATO) of Rs.100 crore or more must generate e-invoices for tax invoices and credit/debit notes within 7 days of the invoice date. However, the 7 day time limit was deferred. Instead, a 30 day time limit was mandated from 1st November 2023 for taxpayers with an AATO of Rs.100 crore or more. This applies to reporting tax invoices, credit notes and debit notes to any notified IRP.

Is e-invoicing mandatory for 5 crore turnover?

Yes, e-invoicing is mandatory for businesses with a turnover exceeding Rs.5 crore in any financial year from 2017-18 onwards. The aggregate turnover will include the turnover of all GSTINs under a single PAN across India. There are certain exemptions to this rule given to certain categories of businesses.

Why is an e-invoice mandatory?

An e-invoice is mandatory to be issued by all e-invoicing eligible businesses in India. Non-generation of e-invoices will imply non-intimation of supply transactions to the government. Any invoice issued by the applicable taxpayer without the IRN is considered an invalid invoice under GST law. In other words, it is regarded as a non-issue of the invoice as per sub-rule (5) of Rule 48 of the CGST Rules and could attract a penalty under the for non-compliance.

Who is exempted from an e-invoice?

The government has exempted certain categories of taxpayers from generating e-invoices, such as-

Insurers or a banking companies or financial institutions, including NBFCs
Goods Transport Agencies (GTA)
A registered person supplying passenger transportation services
A registered person supplying services by way of admission to the exhibition of cinematographic films in multiplex services
SEZ units (excluded via CBIC Notification No. 61/2020 – Central Tax)
Government departments and local authorities (excluded via CBIC Notification No. 23/2021 – Central Tax)
Persons registered in terms of Rule 14 of CGST Rules (OIDAR)

What happens if I don't generate an e invoice?

Non-generation of e-invoices will imply non-intimation of supply transactions to the government. Any invoice issued by the applicable taxpayer without the IRN is considered an invalid invoice under GST law. In other words, it is regarded as a non-issue of the invoice as per sub-rule (5) of Rule 48 of the CGST Rules and could attract a penalty under the for non-compliance.

What is the limit of an e-invoice in GST?

Taxpayers with Annual Aggregate Turnover (AATO) of Rs.100 crore or more must generate e-invoices within 30 days from the date of issue of the invoice or debit/credit note.

About the Author

Annapoorna

Assistant Manager - Content

I preach the words, “Learning never exhausts the mind.” An aspiring CA and a passionate content writer having 4+ years of hands-on experience in deciphering jargon in Indian GST, Income Tax, off late also into the much larger Indian finance ecosystem, I love curating content in various forms to the interest of tax professionals, and enterprises, both big and small. While not writing, you can catch me singing Shāstriya Sangeetha and tuning my violin ;). Read more

Quick Summary

e-Invoicing under GST refers to electronically authenticating B2B invoices through GSTN. Clear offers a trusted e-invoicing solution for businesses, meeting compliance requirements. Recent updates include expanding e-invoicing to B2C transactions. The applicability depends on turnover thresholds, excluding certain businesses. The process involves generating IRN via the Invoice Registration Portal, leading to automation of GST return filing and e-way bill generation. Clear's e-Invoicing solution offers features like API integrations, Excel mode, and seamless generation of e-invoices.